# PRODUCTION FUNCTION

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I would like to fit a production function model using stepwise regression analysis for the sample of 300 aquaculture farms of Kerala. The dependent variable is taken as Revenue. The independent variables are Labour cost, Seed cost, Feed Cost, Fertiliser Cost, Depreciation and other Expenses. The logarithamic values of all variables concerned are taken for anlalysis.

The step wise regression analysis provide a model with 5 independent variables ie. Seed cost, Feed cost, Fertiliser Cost, Depreciation and other expenses. Labour cost is turned to be not significant.

The result from the model is

Y = 6.445+0.346X1+0.107X2+0.243X3-0.227X4+0.106X5

Where Y = Revenue

X1= depreciation; X2=other expenses ; X3= feed cost ; X4 = fertiliser cost; X5 = Seed cost

How will I interpret the result ?

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